Public sector pay: Chief Executive framework review

Pay Ratios

31. While there is no current commitment on pay ratios, a key objective of the 2023-24 Public Sector Pay Strategy, and previous pay policies, is the expectation for progressive pay awards. Pay awards are expected to target lower earners while restraining increases for higher earners to address pay erosion for those facing the greatest detriment and to continue to help work towards reducing overall income inequality.

32. Pay ratios are not a perfect measure and should not be used alone. They can be significantly affected by the workforce profile of a public body, and additionally they do not cover outliers where market rates are a barrier to effective recruitment. Of the 71 public bodies directly subject to Ministers Pay Strategy, there is only one that exceeds the 10:1 ratio and this is Scottish Water (at 14:1).

Recommendation 2: Pay Ratios: No recommendation to adhere to a set ratio. The pay ratio between the CE and the median staff salary should not be a determining factor in setting salaries, however the ratio should be acknowledged when reviewing the CE salary.